Azernews.Az

By Gulgiz Dadashova

Azerbaijan has vast potential in maritime transport in the Caspian Sea and better times are in store for the country.

Baku – the starting point for all of Azerbaijan’s sea transport – boasts the biggest seaport in the Caspian Sea. Azerbaijan's Caspian Sea Shipping Company is among the major ship owning companies in the Caspian basin and its main activity is cargo transportation predominantly in oil and oil products in the Caspian, Black, Mediterranean, and Marmara Seas.

Until recently, Azerbaijan’s Kaspar state-owned Caspian Shipping Company had remained a monopolist in the maritime transportation on the Caspian Sea, said Vugar Sadigov, Assistant to the Director of Azerbaijan's Caspian Sea Shipping Company CJSC.

Now there is stiff competition in the Caspian Sea, Sadigov believes.

“The situation in the maritime transport currently differs from the one in 1990s. The situation changed after 2000. Kazakhstan and Turkmenistan began to create their own navies. They began to acquire new vessels; Kazakhstan pays special attention to the creation of its tanker fleet. They buy tankers of 13,000 tons cargo capacity.”

“Iran has also stepped up work in this direction. Iran is now working to upgrade its dry cargo fleet in the Caspian Sea. Currently, they are carrying a large amount of goods. At the same time there are many ships sailing under the Russian flag. All this affects the competition in the Caspian Sea. So now we can not say that the Caspian Shipping Company is a monopoly in the field of maritime transport,” Sadigov explained.

Sadigov says that a lot must be done to boost the company’s positions in maritime transportation on the Caspian Sea.

“Namely in the first place we need to upgrade our fleet. Any shipper or partner who works with us wants its cargo transported on modern ships, faster and better delivered from point A to point B. So the first thing to do is to renew our fleet, and the company’s leadership is working on this.”

On the other hand, our company itself has to work on new standards.

“Azerbaijan Caspian Shipping Company Head Rauf Veliyev has set a goal and requires all staff to operate according to international standards. To this end, a variety of structural changes and innovations have been made, as well as trainings are being held,” he said, noting that the Caspian Shipping Company has transformed into a modern international company as a result.

Sadigov also touched upon the economic crisis that is currently raging in the world and the challenges for the sector.

“During the financial crisis of 2008, there was a significant slowdown in cargo transportation. And now, with the fall in oil prices, we can see a decrease in cargo transportation in the Caspian region and the Black Sea. All of these crises have a negative impact on transportation. But despite this, we are optimistic about the future,” he said.

The company carries the most freight traffic through the Europe-Caucasus-Asia transport corridor from Baku. The goods are sent to the Kazakh port of Aktau and Turkmen port of Turkmenbashi, and vice versa.

“This corridor runs successfully, despite the fact that the crisis lead to a decline in traffic. The main direction for us is TRACECA,” Sadigov said.

Baku is poised to become a major regional transportation and communications hub for the Trans-Caucasus and Central Asian republics. The TRACECA Program was launched by the European Union in 1993, and encourages the development of a transport corridor on an East-West axis from Central Asia through the Caucasus, across the Black Sea, to Europe. The corridor includes all forms of transport.

26.3 million metric tons of cargo was transported via the TRACECA through Azerbaijan’s territory in January-June 2015, compared to 28.1 million metric tons in the same period of 2014.

Of the total volume of cargo transportation, 56.3 percent accounted for road transport, 30.7 percent – railway and 13 percent – maritime transport, according to the report.

The revenues from cargo transportation via the corridor totaled 259.5 million manat ($246,783 million) during the reporting period, or 7 percent more than in the same period of 2014.

Returning position in overseas

Azerbaijan's Caspian Sea Shipping Company CJSC is eyeing more dry cargo ships in Black Sea, as the company is keen on returning its positions in the Black Sea-Mediterranean basin, Sadigov said.

Following the financial crisis in 2008/2009, the company recalled its cargo ships that were engaged in cargo shipments in the Black Sea-Mediterranean basin.

“The company’s vessels worked there until 2009, but when the market collapsed after the crisis, we returned to the Caspian Sea, because there was more traffic.”

“The markets have recovered, and we, too, will return our position. Therefore the company leadership made a decision on returning to this basin,” he said.

The company returned the "Natavan" and "Uzeir Hajibeyli" cargo vessels to the Black Sea and the Mediterranean basin in 2014. Recently, the cargo vessel "Garadagh" has been sent and the fourth ship "Teymur Ahmadov" awaits loading. In the near future, a fifth freighter, "Maestro Niyazi," will be sent.

“These vessels will be operating at ports in Italy, France, North Africa, Israel, Turkey and so on,” Sadigov said stressing that the number of ships operating can gradually be increased.

Expanding the fleet

Last year, the company purchased 1 tanker, 3 towing supply vessels, and 2 cargo ships through internal resources and with state support.

The ship-supplier "Lankaran," which was commissioned in 2014 with the participation of President Ilham Aliyev, is the only one in the Caspian Sea due to its technical characteristics, Sadigov said.

This ship is equipped with DP2 dynamic positioning system and with extensive technical capabilities. It will be engaged in the implementation of projects such as the "Shah Deniz-2," "Shafag Asiman" and "Absheron Phase-1."

“The Dry cargo vessels ‘Uzeyir Hajibeyli’ and ‘Natavan’ floating in the Black and Mediterranean seas, as I mentioned, secured the return of our fleet after a long break to international maritime transport activities outside the Caspian Sea,” he noted.

Azerbaijan Caspian Shipping is comprised of offshore support and merchant fleets and owns two shipyards with over 9,000 of full-time employees.

The merchant fleet consists of 97 vessels, including 33 tankers, 13 ferries, 14 universal dry-cargo, 2 Ro-Ro ships as well as 35 different auxiliary ships. And the offshore support fleet is comprised of 188 vessels, including 21 crane, 22 supply and tugging, 29 passenger, 2 pipelaying, 7 firefighting, 5 geological, and 11 diving boats, along with 84 other types of support vessels.

The company has also ordered three passenger ships that are being built at the Baku Shipyard. They will provide services to Azerbaijan’s energy giant SOCAR, which is the company’s largest and most loyal partner in implementing oil and gas projects.

“They will transport oil workers. So we will continue close cooperation with SOCAR,” he added.

The shipyard received an order for the construction of three passenger vessels with a capacity of 80 people each in May 2014. The cost of each passenger vessel is estimated at about 8.5 million manat ($8.08 million).

Baku Sea Trade port opens new opportunities

Talking about expectations in sea trade after the launch of the Baku International Port, he said naturally, we expect to increase cargo handling.

“We will surely see a rise in cargo handling and, of course, on the company's profits.”

“The old port was located in the city center, and given the limited space in the center, the port could not be developed in full, in terms of loading and unloading ships. However, the new port is located in a vast area, equipped with modern equipment. These are very good conditions for cargo handling. This will impact on our activities, the vessel will be better served sooner, and stay in the parking lot not for long. All this will affect our turnover,” he said.

The new Baku International Sea Trade Port ferry terminal in Alat, 40 miles south of Baku, was launched in 2014, while the Baku Sea Port has begun upgrades and will be ready for commissioning later this year.

The estimated transshipment volume for the new port complex is up to 10 million tons of cargo and 40,000 TEU containers at the first stage, up to 17 million tons of cargo and 150,000 TEU containers at the second stage, and up to 25 million tons of cargo, and 1 million TEU containers at the third stage of the project. In addition to the logistics center, a free economic zone is planned for this area in the future.

Around 3.1 million metric tons of cargo was transported by ships during January-May 2015, according to the Statistics Committee . All cargo accounted for international operations. The volume of goods handled in Azerbaijani ports amounted to 4.2 million metric tons.

Some 71.2 percent of cargo shipping fell to oil and oil products, while 28.8 percent on dry cargo. The volume of international transit cargo handled in the ports hit 94.5 percent. As of June 1, 2015, around 56,800 metric tons of import cargo left in the ports for transportation.

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